What is Forex Portfolio Management?

Forex trading concept with businessman

What is Forex portfolio management? How is it done? When forex transactions started to become widespread, some methods started to emerge and gained importance. One of them is forex portfolio management. Although some investors use portfolio management, some do not know what portfolio management is and how to do forex portfolio management. We will tell you about it in all details.

Portfolio management is the management of portfolios signed between forex brokerage houses and forex investors by brokerage houses to ensure that the portfolios belonging to the customer are profitable. With this agreement, intermediary institutions are given the title of proxy. In addition, the institutions that will carry out this management must have the Portfolio Management Authorization Certificate. Of course, forex companies in each country operate this procedure differently. If you are already working with a reliable forex company, this will not be a problem. So what is the profile of investors who want to have portfolio management done?

Investor Profile

The common features of investors who want to have portfolio management are as follows;

  • Evaluating their investments in the medium and long term,
  • Keeping their investments in certain investment vehicles,
  • Not having the necessary time to shape their investments,
  • Not having enough knowledge about analyzes and forecasts,
  • Investors with these characteristics generally prefer portfolio management.

How to do Forex Portfolio Management?

First of all, investors determine the portfolio types and the duration of portfolio management. After doing these, they sign a contract with the institution. Of course, in this contract, lower and upper limits are determined for the instruments to be invested and the limits are drawn. After the contract part has passed, a portfolio management special account is opened for customers. Investors transfer the amount they want to be managed to the account opened. After the transfer process is completed, the institution that will manage the portfolio collects all the portfolios in one account and starts the transactions at the beginning of the day. At the end of the day, the transactions are completed and the new portfolio is returned to the accounts according to the amount deposited by each customer. This is how the system works. Portfolios are created periodically. Investors can enter these portfolios at any time. I mean, somewhere in the beginning or in the middle.

Although administrations are used a lot in the medium and long term, there are many who use them for short-term investments as well. This is because portfolios are managed by professionals. What services does this administration cover?

  • Managing portfolios within the framework of the Portfolio Management Agreement between investors and institutions,
  • Carrying out legal studies to make all transactions official,
  • Communicating with investors and submitting reports,
  • Meticulous calculation and distribution of fund income and expenses,
  • Participation share issuance and repurchase process,
  • Fulfilling all obligations regarding portfolio management

What is the Advantages ?

How to invest in Forex can be learned in a short time. But in order to make more profitable transactions, it is necessary to get help from professionals. Portfolio management also increases the profit rate of your transactions. In addition, market monitoring should be done well in order to make profitable transactions in forex. This is a very time consuming situation. If you want to save time, you can have your portfolios managed by professionals. In this way, you can save time and be more profitable.

SEE ALSO; What is Regulation? The Importance of Regulations in Forex

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